Transmission of Financial Statements for the Year Ended September 30,2025

Habib Sugar Mills Limited

1

Board of Directors Asghar D. Habib Chairman

Murtaza Habib Hasnain Habib

Farouq Habib Rahimtoola Sohail Hussain Haji

Muhammad Salman Husain Chawala Tyaba Muslim Habib

Khursheed A. Jamal Chief Executive

Audit Committee Farouq Habib Rahimtoola Chairman

Tyaba Muslim Habib Member

Sohail Hussain Haji Member

Human Resource & Tyaba Muslim Habib Chairperson

Remuneration Committee Hasnain Habib Member

Khursheed A. Jamal Member

Chief Financial Officer Amir Bashir Ahmed

Company Secretary Imran Amin Virani

Registered Office 3rd Floor, Imperial Court, Dr. Ziauddin Ahmed Road, Karachi-75530

Phones : (+92-21) 35680036 - 5 Lines

Fax : (+92-21) 35684086

www : habibsugar.com

E-mail : sugar@habib.com

Mills Sugar & Distillery Division

Nawabshah, District Shaheed Benazirabad Phones : (+92-244) 360751 - 5 Lines

Fax : (+92-244) 361314

Textile Division

D-140/B-1 Manghopir Road

S.I.T.E. Karachi-75700

Phones : (+92-21) 32571325, 32572119

Fax : (+92-21) 32572118

Terminal 60/1-B Oil Installation Area Keamari Karachi-75620 Phones : (+92-21) 32852003-4

Fax : (+92-21) 32852005

Bankers Allied Bank Limited Bank AL Habib Limited Bank Al-Falah Limited Faysal Bank Limited

First Women Bank Limited JS Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited MCB Bank Limited

Meezan Bank Limited National Bank of Pakistan United Bank Limited

Statutory Auditors Grant Thornton Anjum Rahman

Chartered Accountants

Cost Auditors Reanda Haroon Zakaria Aamir Salman Rizwan & Co.

Chartered Accountants

Share Registrar THK Associates (Pvt.) Limited

Plot No. C-32, Jami Commercial Street-2

D.H.A. Phase VII, Karachi.

UAN : (+92-21) 111-000-322

Phone : (+92-21) 35310184

Fax : (+92-21) 35310191

E-mail : sfc@thk.com.pk

2

We aim to be a leading manufacturer and supplier of quality sugar, ethanol, liquidified carbon dioxide (CO2) and household textiles in local and international markets. We aspire to be known for the quality of our products and intend to play a pivotal role in the economic and social development of Pakistan.

As a prominent producer and supplier of sugar, ethanol, liquidified carbon dioxide (CO2) and household textiles, we shall continue to strive to achieve excellence in performance and aim to exceed the expectations of all stakeholders. We target to achieve technological advancements to inculcate the most efficient, ethical and time tested business practices in our management.

3

The founders of Habib Sugar Mills Limited were visionaries who established the company on very sound principles and envisioned its development and growth on the basis of making no compromises in any aspects of business practices. The company takes pride in adherence to its principles and continues to serve its customers, stakeholders and society based on the following guidelines:

• To produce refined, high-grade sugar that is edible and hygienic and provides all the nutrition and food value at standards determined by the company, which would exceed industry norms and averages.

• To produce by-products and allied products including molasses, ethanol and liquidified carbon dioxide (CO2).

• To diversify into other products such as home textiles thus consuming indigenous raw material and generating export earnings.

  Systems & Processes

• To regularly update and upgrade manufacturing systems and processes so as to keep abreast with technological advancements, achieve economies of production and transfer knowledge and skill to workers.

• To develop and maintain the technical and professional standards, standard operating procedures and stringent quality control measures with on-line quality assurance at every stage of manufacture.

• To continuously conduct product research and develop new products, while improving upon the existing products, using ideal additives and packaging material.

• To regularly maintain, replace and upgrade all machinery and equipment for smooth working, optimum output and ensure safe working in all production units.

• To maintain a smooth work-flow in all departments with an effective communication system contained within the framework of principles yet allowing the required degree of autonomy for efficient functioning.

  Management & Employees

• To employ only the appropriately suited human resource through the selection and recruitment process based on the commensurate qualifications and experience criteria without any non-professional considerations, without any bias or prejudice of race, cast, colour, creed or religious beliefs.

• To ensure that all management personnel are adequately qualified to perform management functions as assigned.

• To guide, direct and motivate employees to perform functions and to recognize and reward employees based on their performance outputs.

• To measure employee's performance by a pre-determined criteria so as to be fair and equitable towards every single employee.

• To ensure that all employees work towards achievement of corporate objectives, individually and collectively as a team and conduct themselves at work and in society as respectable employees and responsible citizens.

  4

  
  
  

• To regularly train all employees at all levels to improve their knowledge and skill and provide employees with a career path whereby they can seek a planned betterment in their professional and personal life.

• To ensure that all employees and management personnel strictly adhere to the company rules and regulations and observe the best codes of conduct and abide by all laws of Pakistan.

• To make timely payment of salaries, wages and all allowances and benefits to all employees in line with their terms.

• To ensure all directors and employees of the company shall undertake such activities, whether personal or professional, that in no way conflicts with the interests of the company but contributes towards the betterment, development and growth of the organization in particular and the industry in general.

  Financial

• To implement an effective, transparent and secure financial reporting and internal control system so as to ensure compliance with regulatory factors as well as meet all obligations of payable and receivables and keep investors, shareholders and management fully aware.

• To ensure effective utilization of all company resources and plan and operate resource utilization in order to produce better results and generate better yields and facilitate timely decisions.

• To place a strict Internal Audit system to study, analyze, review and report all company earnings and spending and enhance reliability of all financial information and build shareholders confidence.

• To regularly prepare, as per pre-determined schedules, all financial reports and present accounts to the Board for review and analysis and show trends based on company income, revenues and expenses and industry trends.

• To ensure cost effectiveness and purchase goods and services based on developed criteria, vendor assessment and market competitiveness and evaluate options on prices, terms, products/services, substitute available, prior to purchase.

• To ensure timely and proper payments as per negotiated terms to all suppliers and deduct applicable taxes so as to enhance corporate credibility and image.

• To maintain an excellent relationship with bankers and utilize banking facilities in a manner to benefit company whilst making proper use of funding and facilities available and ensuring no defaults.

  Adherence to Law

• The company shall at all times strictly adhere to all laws of the country and fulfill all statutory requirements and ensure timely, proper and full payment of all applicable taxes, rates, duties and/or any other levies as may be imposed from time to time.

  Environment

• The company shall use all means to ensure a clean, safe, healthy and pollution free environment not only for its workers and employees but for the well being of all people who live in and around any of the production and manufacturing units and employ such technology as may be beneficial in maintaining a healthy and hygienic working and living environment.

  Planning

• The company shall prepare an annual plan with clearly defined objectives, goals and strategies and implement those plans with a close watch on achievements and monitor and control measures shall be built in to ensure achievement of objectives and enhancement of corporate image.

Notice is hereby given that the 64th Annual General Meeting of Habib Sugar Mills Limited will be held on Tuesday, January 27, 2026 at 11:00 a.m. at Auditorium Hall - The Institute of Chartered Accountants of Pakistan (ICAP), Chartered Accountants Avenue, Clifton, Karachi to transact the following business:

Ordinary Business

1. To receive and consider the audited financial statements, the Directors' report and the Auditors' report for the year ended September 30, 2025.

2. To approve payment of cash dividend @ 120% i.e., Rs. 6 per share of Rs. 5 each for the year ended September 30, 2025 as recommended by the Board of Directors.

3. To appoint auditors of the Company for the year ending September 30, 2026 and fix their remuneration.

4. To elect directors of the Company in accordance with the provisions of section 159 of the Companies Act, 2017. The number of elected directors of the Company fixed by the Board of Directors is seven (7). The retiring Directors are as follows:

   1. Asghar D. Habib

   2. Murtaza Habib

   3. Hasnain Habib

   4. Farouq Habib Rahimtoola

   5. Sohail Hussain Haji

   6. Muhammad Salman Husain Chawala

   7. Ms. Tyaba Muslim Habib.

      Special Business

5. To approve the remuneration of the Executive Director

A statement under section 134(3) of the Companies Act, 2017 in respect of the Special Business of the agenda at item No. 5 to be considered at the meeting is being sent to the members alongwith a copy of this notice.

By order of the Board

Karachi: December 17, 2025

Company Secretary

Notes:

1. Closure of Share Transfer Books

   The Share Transfer Books of the Company will remain closed from Friday, January 16, 2026 to Tuesday, January 27, 2026 both days inclusive.

2. Circulation of Annual Report through QR Code and Weblink

   In accordance with section 223 of the Companies Act, 2017 and pursuant to SECP's SRO 389(1)/2023 dated March 21, 2023, the Company had obtained shareholders' approval in the 62nd Annual General Meeting (AGM) of the Company held on January 24, 2024 to circulate the Annual Report of the Company to members through QR enabled Code and Weblink. The Annual Report is available through the following QR Code and Weblink:

   http;//https://www.habibsugar.com/investor-information/financial-statements

   
   
   

   Further as required under section 223 of the Companies Act, 2017 read with SECP's SRO 389(1)/2023 dated March 21, 2023, the Company shall circulate the Annual Report to members through e-mail in case e-mails addresses have been provided by the members to the Company. The Company shall also send the Annual Report in hard copy to a member on his/her request, free of cost, within one week, if request has been made on the standard request form available on the website of the Company.

3. Proxy

   A member entitled to attend and vote at this meeting is entitled to appoint another member of the Company as a proxy to attend and vote on his / her behalf. Proxies in order to be effective must be received at the Registered Office of the Company duly stamped and signed at least 48 hours before the time of meeting. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be provided at least 48 hours before the time of the meeting. The Proxy Form in English and Urdu is enclosed with the notice of the Annual General Meeting and also available on the Company's website (https://www.habibsugar.com).

4. Virtual Participation in Annual General Meeting

   In light of the relevant guidelines issued by the SECP from time to time, the shareholders may attend the Annual General Meeting through electronic facility by providing the following information to the Company at the e-mail address; companysecretary@habibsugar.com atleast 2 working days before the date of the meeting:

   Name of the shareholder	CNIC Number	Folio/CDC Account No.	No. of share	Contact No.	E-mail Address

   Online meeting link and login credentials will be shared with only those members whose e-mail containing all the above information have been received by the Company within the stipulated time.

5. For Identification

   Owners of the physical shares and CDC account holder should present Computerized National Identity Card (CNIC) along with participant ID number and CDC account number. In case of appointment of proxy by such account holder(s), the guidelines as contained in the SECP's circular of 26th January 2000 are to be followed.

6. Mandatory information - (Address, CNIC, IBAN, e-mail and Zakat Declaration)

   Under section 119 of the Companies Act, 2017, the Company is required to maintain a register of its members. Members are therefore, requested to immediately provide or update their mandatory information such as Address, CNIC Number, e-mail address & contact number and International Banking Account Number (IBAN) and also provide copies of their CNICs for updating the Company's Register of members. In case of non-compliance on part of members, distribution of dividends will be withheld in terms of Regulation 6 of the Companies (Distribution of Dividends) Regulations, 2017. The requested information may be provided in following manner:

   • In case of physical shares - To M/s THK Associates (Private) Limited

   • In case of shares in CDC - To CDC Investor Account Services or respective participant

     In case of claiming Zakat Exemption, members are requested to submit declaration (CZ-50 Form) as required under the Zakat & Ushr Ordinance, 1980.

7. Withholding Tax on Dividend

   As per Income Tax Ordinance 2001, different rates are prescribed for deduction of withholding tax on the amount of dividend paid by the companies. These rates are as follows:

   1. For filers of income tax returns 15 %

   2. For non-filers of income tax returns 30 %

   
   
   

   Shareholders are advised to make sure that their names are entered into Active Tax-payers List (ATL) provided on the website of FBR before the book closure of the Company, otherwise tax on their cash dividend will be deducted @ 30% instead of 15 %.

   For shareholders holding their shares jointly, as per the clarification issued by the Federal Board of Revenue, withholding tax will be determined separately on 'Filer/Non-Filer' status of Principle shareholder as well as joint-holder(s) based on their shareholding proportions. Therefore, all shareholders who hold shares jointly are required to provide shareholding proportions of Principle shareholder and Joint-holder(s) in respect of shares held by them to our share registrar, in writing as follows:

   Company Name	Folio/CDC Account No.	Total shares	Priniciple Shareholder		Joint Shareholder(s)
   			Name and CNIC #	Shareholding Proportion (No. of Shares)	Name and CNIC #	Shareholding Proportion (No. of Shares)

   The Corporate shareholders having CDC account are required to have their National Tax number (NTN) updated with their respective participants, whereas physical shareholders should send a copy of their NTN certificate to the company or Company's Share Registrar M/s THK Associates (Pvt.) Limited. The shareholders while sending NTN or NTN certificate, as the case may be, must quote company name and their respective Folio numbers.

8. Valid tax Exemption Certificate for Exemption from Withholding Tax

   Withholding Tax exemption from the dividend income shall only be allowed if copy of valid tax exemption certificate is made available to Share Registrar before the Book Closure of the Company.

9. E-Dividend Bank Mandate - Mandatory requirement of Bank details for payment of dividend

   Section 242 of the Companies Act, 2017 provides that in case of a listed company, any cash dividend declared by the company must be paid electronically directly into the bank accounts of the shareholders. In order to receive dividends directly into their bank account, shareholders in case of physical shares, are requested to fill in E-Dividend Mandate Form available on the Company's website i.e. https://www.habibsugar.com and send it duly signed along with a copy of CNIC to the Registrar of the Company M/s. THK Associates (Pvt.) Limited. In case shares are held in CDC, E-Dividend Mandate Form must be submitted directly to shareholder's broker/participant/CDC investor account services. In-case of non-submission of IBAN, the Company will withhold the payment of dividends under the Companies (Distribution of Dividends) Regulations, 2017. Further, the information regarding gross dividend, tax/zakat deduction and net amount of dividend will be provided through the Centralized Cash Dividend Register (CCDR), therefore, shareholders should register themselves to CDC's eServices Portal at https://eservices.cdcaccess.com.pk.

10. Participation in the Annual General Meeting via Video Conference Facility

    In terms of section 134(1)(b) of the Companies Act, 2017, members holding in aggregate 10% or more shareholding can also avail video conference facility to attend the Annual General Meeting. In this regard, please fill the following information and share at companysecretary@habibsugar.com seven (7) days before holding the Annual General Meeting. If the Company receives consent from members residing at a geographical location, to participate in the meeting through video conference atleast seven (7) days prior to date of meeting, the Company will arrange video conference facility in the city subject to availability of such facility in the city.

    "I/We of , being a member of Habib Sugar Mills Limited, holder of

    ordinary shares(s) as per Registered Folio No. hereby opt for video conference facility at ".

    
    
    

    Video conference link details and login credentials will be e-mailed to the registered members/proxies who have provided all the requested information. Shareholders can also provide their comments and questions for the agenda items of the AGM on companysecretary@habibsugar.com at least 48 hours before the time of the meeting.

    Further,

11. E-Voting and Postal Ballot

    It is hereby notified that pursuant to the Companies (Postal Ballot) Regulations, 2018 and its amendments from time to time, members will be allowed to exercise their right to vote for the special business(es) in the AGM, in accordance with the conditions mentioned in the aforesaid Regulations. The Company shall provide its members with the following options for voting:

    Procedure for E-Voting

    1. Details of the e-voting facility will be shared through an e-mail with those members of the Company who have their valid CNIC numbers, cell numbers, and e-mail addresses available in the register of members of the Company by the close of business on January 15, 2026.

    2. The web address, login details, and password, will be communicated to members via email. The security codes will be communicated to members through SMS from the web portal of THK Associates (Private) Limited (being the e-voting service provider).

    3. Identity of the Members intending to cast vote through e-voting shall be authenticated through electronic signature or authentication for login.

    4. E-Voting lines will start from Thursday, January 22, 2026, 09:15 a.m. and shall close on Monday, January 26, 2026 at 5:00 p.m. Members can cast their votes any time during this period. Once the vote on a resolution is cast by a Member, he / she shall not be allowed to change it subsequently.

    Procedure for Voting Through Postal Ballot

    1. Members may alternatively opt for voting through postal ballot. For the convenience of the members, Ballot Paper is annexed to this notice and the same is also available on the Company's website https://www.habibsugar.com

    2. The members must ensure that the duly filled and signed ballot paper, along with a copy of Computerized National Identity Card (CNIC) should reach the Chairman of the meeting through post at the Company's Registered Office, Habib Sugar Mills Limited, 3rd Floor, Imperial Court, Dr. Ziauddind Ahmed Road, Karachi or email at companysecretary@habibsugar.com one day before the AGM, i.e., on Monday, January 26, 2026 before 5:00 p.m. A postal ballot received after this time / date shall not be considered for voting. The signature on the Ballot Paper shall match with signature on the CNIC

12. Conversion of Physical Shares into Book Entry Form

As per Section 72 of the Companies Act, 2017 all existing companies are required to convert their physical shares into book-entry form within a period not exceeding four years from the date of commencement of Companies Act, 2017.

The Securities and Exchange Commission of Pakistan through its circular No. CSD/ED/Misc/2016- 639-640 dated March 26, 2021 has advised the listed companies to pursue their such members who still hold shares in physical form to convert their shares into book entry form.

If shares are converted into book entry form, it would help to reduce the risk associated with physical shares which are susceptible to be lost or damaged. Further, handling of book entry securities in case of corporate actions i.e., issue of bonus/right shares and transferring and selling of shares would be much easier.

We hereby request all members who are holding shares in physical form to convert their shares into book-entry form at the earliest.

For any query / clarification / information, the shareholder may contact the company, and /or the share registrar at the following addresses;

Company Address: Share Registrar Address:

Habib Sugar Mills Limited THK Associates (Pvt.) Limited

3rd Floor, Imperial Court Plot No. 32-C, Jami Commercial Street-2, D.H.A. Dr. Ziauddin Ahmed Road, Karachi-75530 Phase VII, Karachi-75500

Phones : (+92-21) 35680036 - 5 Lines UAN : (+92-21) 111-000-322,

Fax : (+92-21) 35684086 Phone : (+92-21) 35310191-193

e-mail : companysecretary@habibsugar.com Fax : (+92-21) 35310190

e.mail: sfc@thk.com.pk

Statement under section 166(3) of the Companies Act, 2017

Persons eligible under section 166 of the Companies Act, 2017 and the Companies (Manner and Selection of Independent Directors) Regulations, 2018, may submit their nominations to be elected as independent directors. However, it is noteworthy to mention that independent directors shall be elected in the same manner as other directors are elected in terms of Section 159 of the Companies Act, 2017.

Statement under section 134(3) of the Companies Act, 2017

This statement sets out the material facts concerning the Special Business to be transacted at the 64th Annual General Meeting of the Company to be held on January 27, 2026:

Item 5 of the agenda - Approval of remuneration of the Executive Director:

(Disclosure under section 213)

The Board of Directors in their Meeting held on December 17, 2025 have recommended payment of the following remuneration to the Executive Director of the Company, for a period of three years commencing from February 1, 2026, subject to an increment not exceeding 20% per annum.

Remuneration per month

Mr. Murtaza Habib 1,488,000

In addition, he will be provided with two company maintained cars, reimbursement of utilities, entertainment at actuals and other benefits as per policy of the Company which in aggregate is estimated to be approximately 40% of his remuneration as stated above.

The above Director has interest in the aforesaid business to the extent of his remuneration and perquisites as mentioned above.

FOR VOTING IN THE ANNUAL GENERAL MEETING OF HABIB SUGAR MILLS LIMITED TO BE HELD ON JANUARY 27, 2026 AT 11:00 A.M AT THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN, CHARTERED ACCOUNTANTS AVENUE, CLIFTON, KARACHI

(UNDER THE COMPANIES (POSTAL BALLOT) REGULATIONS, 2018)

HABIB SUGAR MILLS LIMITED

Registered Office: 3rd Floor, Imperial Court, Dr. Ziauddin Ahmed Road, Karachi Phone No. (92-21) 35680036 Fax No. (92-21) 35684086

Website: https://http://www.habibsugar.com

Designated email address at which the duly filled in ballot paper may be sent: companysecretary @habibsugar.com

I/we hereby exercise my/our vote in respect of the following resolution through postal ballot by conveying my/our assent or dissent to the following resolution by placing tick (✓) mark in the appropriate box below

Signature of Shareholder(s)

PROCEDURE FOR SUBMISSION OF BALLOT PAPER:

1. Dully filled postal ballot should be sent to the Chairman, Habib Sugar Mills Limited, 3rd Floor, Imperial Court, Dr. Ziauddin Ahmed Road, Karachi - Pakistan or at e-mail: companysecretary@habibsugar.com

2. Copy of CNIC/Passport (in case of foreigner) should be enclosed with the postal ballot form.

3. Postal ballot forms should reach chairman of the meeting on or before January 26, 2026 during working hours. Any postal ballot received after this date, will not be considered for voting.

4. Signature on postal ballot should match with signature on CNIC/Passport (in case of foreigner).

5. Incomplete, unsigned, incorrect, defaced, torn, mutilated, over written ballot paper will be rejected.

6. In case of a representative of a body corporate, corporation or Federal Government, the Ballot Paper Form must be accompanied by a copy of the CNIC of an authorized person, and attested copy of Board Resolution/ Power of Attorney/ Authorization Letter etc., in accordance with Section (s) 138 or 139 of the Companies Act, 2017 as applicable. In the case of foreign body corporate etc., all documents must be attested by the Counsel General of Pakistan having jurisdiction over the member.

7. Ballot Paper Form has also been placed on the website of the Company at: https://www.habibsugar.com

It is my pleasure to present this report to the shareholders of the Company on the performance of the Board of Directors and their effectiveness in guiding the Company towards accomplishing its aims and objectives.

Habib Sugar Mills Limited has implemented a strong governance framework that supports effective and prudent management of business matters, which is regarded as instrumental in achieving the Company's long-term success. The effective governance implemented by the Company is evident from the strong liquidity position and total profit of Rs. 2,245 million, including Realized Gain on Sale of Investments (shown directly in the Statement of Changes in Equity) (2024: Rs. 2,053 million).

The Federal Government has recently constituted a committee for complete de-regulation of the sugar industry and we are hopeful for a favorable decision in this regard. As a first step towards de-regulation, the Provincial Governments did not notify minimum support prices of sugarcane for the crushing season 2024-25 leaving sugarcane prices to be determined by market forces. If the sugar sector is completely de-regulated, not only the sugar sector would reap the benefits through open exports and better local prices of sugar but the growers will also get better prices for their cane crop.

During the financial year 2024-25, the Board met four (4) times. The Board has complied with all the regulatory requirements and acted in accordance with applicable laws and best practices.

As required under the Code of Corporate Governance, an annual evaluation of the Board of the Company was conducted. The purpose of this evaluation was to ensure that the overall performance and effectiveness of the Board are measured and benchmarked against expectations in the context of objectives set for the Company.

The Board ensured adequate representation of non-executive and independent directors on the Board and its Committees as required under the CCG. The members of the Board and its respective Committees possess adequate skills, experience and ability required to perform their responsibilities.

The Board has actively participated in strategic planning, risk management and policy development and ensured the integration of all policies and convergence to the Company's vision and mission. The Board also sets annual budgets, targets and goals for the management.

The Board and its Committees have diligently performed their duties and remained updated with respect to the achievement of the Company's objectives, goals, strategies and financial performance through regular presentations by the management. The Board held extensive and fruitful discussions to arrive at decisions and appropriate direction and oversight is provided to the management on a timely basis. Areas where improvements are required are duly considered and action plans are framed and implemented.

The Board has developed an environment of a clear and transparent system of governance by setting up an adequate and effective internal control system through self-assessment mechanisms and internal audit activities. Further, the Board ensured compliance with the best practices of corporate governance.

Finally, I wish to acknowledge the commitment and diligence of my fellow directors during our tenure of three years, which will be completed at the next Annual General Meeting of the Company, the executive team and all the employees of the Company for their hard work and contribution towards the growth of the Company.

Karachi: December 17, 2025 Chairman

The Board of Directors are pleased to present their report along with the annual audited financial statements of your Company for the year ended September 30, 2025.

By the Grace of Almighty Allah, during the year under review, the operations of your Company resulted in total profit of Rs. 2,245.34 million including Realized Gain on Sale of Investments shown directly in the Statement of Changes in Equity (2024: Rs. 2,053.04 million). The summarized results and appropriations, as recommended by the Board, are as follows:

September 30, September 30, Variance

2025 2024

(Rupees in Million)

Profit before levies and income tax 2,810.77 2,715.47 95.30

Taxation (1,255.00) (755.00) (500)

Profit after tax for the year 1,555.77 1,960.47 (404.70) Adjustments for:

Actuarial gain / (loss) on Gratuity Fund Valuation Realized gain on sale of investments

689.57 92.57 597.00

Profit including Realized gain on sale of investments 2,245.34 2,053.04 192.30

Unappropriated profit brought forward 247.59 4.55 243.04

Profit available for appropriation 2,492.93 2,057.59 435.34

Cash Dividend Proposed @ 120% (September 30, 2024: @ 120%)

Transfer to General Reserve

2,310.00 1,810.00 (500.00)

Unappropriated profit carried forward 182.93 247.59 (64.66) Share Capital (No. of shares @ Rs. 5 each) 135,000,000 135,000,000 -Earnings Per Share (EPS) - Basic and diluted

EPS on profit after tax for the year (Rs) 11.52 14.52 (3.00) EPS on profit after tax for the year including

15

The overall performance of the Company for the period under review after considering the effect of Realized Gain on Sale of Investments (shown directly in the Statement of Changes in Equity) has improved compared to the preceding period.

The Realized Gain on Sale of Investments (shown directly in the statement of changes in equity) significantly increased during the year under review to Rs. 689 million (2024: 94 million) for the reason that the Company had diverted its investment in the units of mutual funds on short-term basis from fixed deposits/saving accounts for securing better returns.

In addition to the above, the Company also earned a dividend income of Rs. 503 million (2024: 968 million).

The tax expense for the period under review increased by Rs. 500 million mainly due to change in the basis of tax on the income from exports. During the last year, only the last quarter's income was covered under the Normal tax whereas in the current year, all four quarters' income was covered under the Normal tax.

The crushing season for 2024-25 commenced on November 20, 2024, and the plant operated up to March 5, 2025, for 106 days as against 110 days in the preceding season.

Unlike the previous practice, the Sindh Government did not issue a notification for fixing a minimum support price for the purchase of sugarcane for the crushing season 2024-25. The Company therefore, procured sugarcane from growers at prevailing market rates.

The comparative statistics of the division's operations are given below :

The sugar division earned an operating profit of Rs. 1,468 million (2024: Rs. 844 million). The increase in operating profit was mainly attributable to higher quantum of sales due to carry over stocks.

The division earned an operating profit of Rs. 635 million (2024: Rs. 784 million). The decrease in the profit was mainly due to depressed Ethanol selling prices in the international market and lower sales quantum.

The contribution of the Liquified Carbon Dioxide (CO2) unit is included in the results of the division.

The Comparative statistics of the division's operations are given below:

During the year under review, the division earned an operating profit of Rs. 3 million (2024: Rs. 15 million). The decrease in profit was mainly attributable to depressed selling prices and lower sales volume.

The comparative statistics of the division's operations are given below:

The Pakistan Sugar Mills Association has requested the Federal Government to fully de-regulate the sugar sector so that the industry can operate under free market mechanism and also compete internationally through open exports. As a first step towards de-regulation, the Provincial Governments did not notify minimum support prices of sugarcane for the crushing season 2024-25 leaving sugarcane prices to be determined by market forces. Further, the Federal Government has recently constituted a committee for complete de-regulation of the sugar industry and we are hopeful for a favorable decision in this regard.

There has been a consistent upward trend in PSX-100 Index while interest rates have declined significantly over the last couple of years. In view of this scenario, the Company is focusing on optimal utilization of its surplus liquid funds as evident from substantial increase in the realized and unrealized gain on the investments of the Company in the shares of listed companies and the units of mutual funds.

The sugar division commenced crushing operations on November 30, 2025, and up to December 16, 2025, the division crushed 112,513 M. Tons of sugarcane with an average sucrose recovery of 9.48% and sugar production of 10,667 M. Tons.

During the current year up to December 16, 2025, the distillery division produced 3,424 M. Tons of ethanol and 1,364 M. Tons of Liquified Carbon Dioxide.

Efforts are being made to explore additional export markets to achieve higher sales volume and profitability.

The Company has established an Audit Committee as required under the Code of Corporate Governance. The Audit Committee comprises three members, all of them are independent non-executive directors. During the year, four meetings of the Audit Committee were held and the attendance at the meetings was as follows:

No. of meetings

The Company has established an HR and Remuneration Committee as required under the Code of Corporate Governance. The Committee comprises three members, two of whom are non-executive directors. The CEO of the Company is also a member of the Committee. The Chairperson of the Committee is an independent non-executive director. During the year, 3 meetings of the Committee were held and the attendance at the meetings was as follows:

Habib Sugar Mills Limited's Corporate Social Responsibility (CSR) programme dates back to its inception in 1962. Responding to the needs of local communities, the Company's CSR portfolio has widened over the years to include social welfare, education, healthcare, infrastructural development and livelihood generation.

As part of its core values, the Company places tremendous importance on contributing to the well-being of the communities surrounding the mills. As a responsible corporate citizen, the Company has regularly undertaken several welfare activities, viz., running of school up to secondary level, holding of eye camps, financial assistance to villagers in the surrounding area of the mills and supply of free ration, medical assistance and educational support to the needy people. The contribution of the Company to the social and economic uplift of the surrounding areas has been acknowledged at all levels.

The Company has employed persons with physical disabilities (differently able persons) in compliance with the Disabled Persons (Employment & Rehabilitation) Ordinance, 1981

HSM School has been running successfully for many years to impart quality education to the children of HSM employees. The school provides its students with a healthy, safe and conducive environment for learning. The school not only focuses on academics but also aims at the spiritual, social, moral and physical growth of its students.

During the year, the company continued its support of the Family Education Services Foundation (FESF), a non-profit organization, to run a school for deaf children at Nawabshah. Your Company has donated Rs. 40.00 million during the year, and at present, a large number of students are enrolled in the school. The campus is the first-ever educational facility of its kind for the deaf in Nawabshah and will enable deaf students to receive education in an environment that maximizes their potential and enhances their quality of life.

The Company also donated Rs. 15.53 million to different recognized charitable institutions, which are providing education and financial support to needy persons and establishing positive social trends in society.

Being a responsible corporate citizen, the Company is fully committed to meeting all the standards concerning health, safety and the environment.

The Management of HSM believes that the protection of the environment is important for the survival of every person, and as such, the Company attaches utmost importance to providing a healthy atmosphere to its employees and residents of Nawabshah. Your Company continues to be conscious of its social responsibility, and the management has taken appropriate steps to achieve a pollution-free environment.

The fly ash removal systems installed in the boilers of the mills continue to operate satisfactorily, and the spread of black soot particles has been eliminated. The Company has installed a sugar factory wastewater treatment plant to remove oil, grease and total suspended solids from the wastewater. The project has since been completed, yielding satisfactory results.

The installation of slop treatment plant and carbon dioxide recovery plants are the manifestation of our social responsibility, which has helped us to reduce greenhouse gas emissions from our operations.

By the grace of Allah, the successful operations of these projects have helped us to achieve a pollution-free environment for the residents of Nawabshah.

In addition to the above, the Company is providing clean drinking water to nearby villagers and neighbors. The Company also ensures to provide regular Occupational Health Surveillance of employees conducted by Social Security / Peoples Medical Hospital Shaheed Benazirabad and Personnel Protective equipment provided to specified work to all employees for its proper utilization in the workplace.

Continuing the efforts to contribute to conserving the environment, the tree plantation drive of the Company is continuing in the factory premises and surrounding areas to make the area greener and improve the environmental ecology and promote environmental friendliness. During this activity, people were also briefed about the significance and benefits of tree plantation for the mitigation of climate change to build safer areas. The Company has so far planted approximately 5,000 trees, and further plantation of trees is under process. Contribution to the National Exchequer

Your Company contributed an amount of over Rs. 5,000 million to the Government treasury in the form of taxes, levies, sales-tax and excise duty in addition to precious foreign exchange earned, equivalent to Pak Rupees 6,529 million (US$ 23 million) during the year under review from exports of sugar, ethanol and household textiles.

The auditors, Messrs. Grant Thornton Anjum Rahman, Chartered Accountants, have completed their statutory audit assignment for the year ended on September 30, 2025, and are retiring at the conclusion of 64th Annual General Meeting. The retiring auditors have offered themselves for re-appointment for the upcoming year.

The Audit Committee and the Board of Directors have recommended the appointment of Messrs. Grant Thornton Anjum Rahman, Chartered Accountants, as auditors of the Company for the ensuing year for the consideration and approval of the members at the forthcoming Annual General Meeting.

• The financial statements prepared by the Company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

• Proper books of accounts of the Company have been maintained.

• Appropriate accounting policies have been consistently applied in the preparation of the financial statements. Changes, if any, have been adequately disclosed, and accounting estimates are based on reasonable and prudent judgments.

• International Financial Reporting Standards, as applicable in Pakistan, have been followed in the preparation of the financial statements, and deviation therefrom, if any, has been adequately disclosed.

  
  
  

  • The system of internal controls is sound in design and has been effectively implemented and monitored regularly.

  • There are no significant doubts about the Company's ability to continue as a going concern.

  • There has been no material departure from the best practices of corporate governance, as detailed in the Listing Regulations.

  • Key operating and financial data for the last six years in a summarized form is given on page 13.

  • Information about the taxes and levies is given in the notes to the financial statements.

Value of investments, including profit accrued thereon and balances in deposit / current accounts of Provident Fund and Gratuity Fund as of September 30, 2025, were as follows:

Rs.'000

Provident Fund 457,929

Gratuity Fund 196,600

During the year, four meetings of the Board of Directors were held, and the attendance by each Director was as follows:

Name of Director Number of meetings attended

Mr. Asghar D. Habib 3

Mr. Murtaza Habib 4

Mr. Hasnain Habib 3

Mr. Farouq Habib Rahimtoola 4

Mr. Sohail Hussain Haji 3

Ms. Tyaba Muslim Habib 4

Mr. Muhammad Salman Husain Chawala 4

Mr. Khursheed A. Jamal 4

The pattern of shareholding and additional information regarding the pattern of shareholding is given on pages 65 and 66.

The shareholding of the Directors, CEO, CFO, Company Secretary and their spouses and minor children is given on Page 67.

The Directors of the Company would like to thank all the staff, shareholders, financial institutions and other stakeholders of the Company for their continued support and cooperation.

On behalf of the Board of Directors

Chief Executive

Director

Karachi: December 17, 2025

The Company has complied with the requirement of the Regulations in the following manner:

1. The total numbers of Directors are Eight (8) as per the following:

   1. Male: Seven (7)

   2. Female: One (1)

2. The Composition of the Board is as follows:

   1. Independent Directors Mr. Farouq Habib Rahimtoola Mr. Sohail Hussain Haji

      Ms. Tyaba Muslim Habib

   2. Non-Executive Directors Mr. Asghar D. Habib Mr. Hasnain Habib

      Mr. Muhammad Salman Husain Chawala

   3. Executive Directors Mr. Murtaza Habib

      Mr. Khursheed A. Jamal

3. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this Company.

4. The Company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to disseminate it throughout the Company along with its supporting policies and procedures.

5. The Board has developed a vision / mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of the significant policies along with the dates on which these were approved or amended have been maintained.

6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the Board / Shareholders as empowered by the relevant provisions of the Act and these Regulations.

7. The meetings of the Board were presided over by the Chairman and in his absence by a director elected by the Board for this purpose. The Board has complied with the requirements of the Act and the Regulations with respect to frequency, recording and circulating minutes of meetings of Board.

8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these Regulations.

9. The following Directors have either obtained certificates of Directors' Training Program or are exempted from the requirement of Directors' Training Program as per the Listed Companies (Code of Corporate Governance) Regulations, 2019:

   Mr. Asghar D. Habib Mr. Murtaza Habib Mr. Hasnain Habib

   Mr. Farouq Habib Rahimtoola Mr. Sohail Hussain Haji

   Mr. Muhammad Salman Husain Chawala Ms. Tyaba Muslim Habib

   Mr. Khursheed A. Jamal

   
   
   

10. The Board has approved appointment of Chief Executive Officer, Chief Financial Officer, Company Secretary and Head of Internal Audit, including their remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations.

11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the Board.

12. The Board has formed Committees comprising of members given below:

    Audit Committee	HR and Remuneration Committee
    Mr. Farouq Habib Rahimtoola (Chairman)	Ms. Tyaba Muslim Habib (Chairperson)
    Mr. Sohail Hussain Haji	Mr. Hasnain Habib
    Ms. Tyaba Muslim Habib	Mr. Khursheed A. Jamal

13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committees for compliance.

14. The frequency of meetings (quarterly/halfyearly/yearly) of the committees were as per following :

    1. Audit committee: four (4) meetings held during the year ended September 30, 2025

    2. HR and Remuneration committee: three (3) meetings held during the year ended September 30, 2025.

15. The Board has set up an effective internal audit function supervised by a person who is an associate member of the Institute of Cost and Management Accountants of Pakistan (ACMA) and considered suitably qualified and experienced for the purpose and conversant with the policies and procedures of the Company.

16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan (ICAP) and registered with Audit Oversight Board of Pakistan, that they and all their partners are in compliance with International Federation of Accountants (IFAC) guidelines on the code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal Audit, Company Secretary or Director of the Company.

17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Act, these Regulations or any other regulatory requirements and the auditors have confirmed that they have observed IFAC guidelines in this regard.

18. We confirm that all requirements of regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have been complied with.

Chairman

Karachi: December 17, 2025

Grant Thornton Anjum Rahman

1st & 3rd Floor, Modern Motors House, Beaumont Road, Karachi, Pakistan.

T +92 21 35672951-56

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Habib Sugar Mills Limited (the Company) for the year ended 30 September 2025 in accordance with the requirements of regulation 36 of the Regulations.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations.

As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only required and have ensured compliance with this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as applicable to the Company for the year ended 30 September 2025.

Chartered Accountants Place: Karachi

Date: 30 December 2025

UDIN: CR202510093LkFpd0NuO

Grant Thornton Anjum Rahman

1st & 3rd Floor, Modern Motors House, Beaumont Road, Karachi, Pakistan.

T +92 21 35672951-56

We have audited the annexed financial statements of Habib Sugar Mills Limited (the Company), which comprise the statement of financial position as at 30 September 2025, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to explanations given to us, the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 30 September 2025 and of the profit, total comprehensive income, the changes in equity and its cash flows for the year then ended.

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Following are the Key audit matters:

Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017 (XIX of 2017) for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of directors of the Company are responsible for overseeing the Company's financial reporting process.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainity exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

26

We also provide to the Board of directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Based on our audit, we further report that in our opinion:

1. proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);

2. the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;

3. investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's business; and

4. zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

The engagement partner on the audit resulting in this independent auditor's report is Khurram Jameel.

Chartered Accountants Place: Karachi

Date: 30 December 2025

UDIN: AR202510093baj74QDVo

27

Note 2025 2024

(Rupees in thousands)

Property, plant and equipment 6 2,125,198 2,092,699

Right-of-use assets 11,056 14,849

Short-term investments 12

Cash and bank balances 13

7,374,109

2,557,066

5,780,392

1,101,319

14,521,056 14,320,942

Authorised Share Capital

150,000,000 Ordinary shares of Rs. 5/- each 750,000 750,000

Issued, subscribed and paid-up capital 14 675,000 675,000

Reserves 15 16,768,423 12,498,094

Deferred taxation 16 593,800 328,500 Lease Liability - 10,798

593,800 339,298

Trade and other payables 17

Contract liability 18

Short term borrowings 19

Unclaimed dividends Accured mark-up Taxation - net

Current portion of lease Liability

2,885,963

1,013,026

615,497

427,920 -

506,852

15,935

3,092,874

2,115,996

906,732

272,090

1,917

79,911

8,010

5,465,193 6,477,530

The annexed notes 1 to 39 form an integral part of these financial statements.

Chief Financial Officer

28

Chief Executive

Director

Note 2025 2024

(Rupees in thousands)

The annexed notes 1 to 39 form an integral part of these financial statements.

Chief Financial Officer

Chief Executive

Director

29